Markets notch up modest gains amid rising economic toll
Stocks rebounded on Thursday, with the Dow Jones Industrial Average gathering momentum after closing below 20,000 for the first time since 2017.
The Dow notched up gains of around 200 points by Thursday afternoon, while the S&P 500 rose by just under 1 percent and the tech-heavy Nasdaq traded higher by around 3 percent, boosted by stock gains at Facebook and Amazon.
While Wednesday’s markets saw steep losses, overnight efforts by the Federal Reserve and other central banks stemmed some of the sell-off pressure. The Fed announced it would extend its currency exchange program to other central banks around the world as the demand for dollars intensifies. The Dow had dipped as much as 2,300 points on Wednesday, before regaining some of its losses by the end of the day.
Newly released data that showed a significant spike in unemployment levels also put some pressure on stocks on Thursday, with 281,000 people filing claims, far higher than last week’s 211,000.
Investor sentiment remains negative both about the way the crisis is being handled, and about what the future holds.
Hedge fund manager Bill Ackman told CNBC on Wednesday that the virus would “wreak destruction on financial markets,” noting that “America will end as we know it” unless the country shuts down for 30 days to control the spread of the virus.
“Capitalism does not work in an 18-month shutdown, capitalism can work in a 30-day shutdown,” he said.
Investor Ray Dalio said Thursday that the total cost to U.S. companies could be $4 trillion, telling CNBC, “What’s happening has not happened in our lifetime before … What we have is a crisis. There will also be individuals who have very big losses. There’s a need for the government to spend more money, a lot more money.”